SEC to investigate US companies for potential FIFA bribes

The Securities and Exchange Commission has opened an investigation into the companies with business links to FIFA, the global soccer organization, Reuters reported. Publicly traded U.S. companies are seen as vulnerable to allegations they may have bribed FIFA officials to obtain contracts such as marketing, sponsorship and broadcast media rights. Reuters said that Nike
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is probably one of the companies being scrutinized by the SEC even though it has not been named or charged with any wrongdoing. That’s because the indictment of FIFA officials by U.S. prosecutors described a “$160 million, 10-year deal signed by “Sportswear Company A” that “matched exactly” the details of Nike’s 1996 deal in Brazil to become the footwear and apparel supplier and sponsor of the Brazilian national team. In other FIFA news Reuters reported that U.S. official Jeffrey Webb pleaded not guilty in a Brooklyn court on Saturday, after being extradited from Switzerland, on charges of racketeering conspiracy, wire fraud and money laundering. He was released on a $10 million bond but is under house arrest, and he and his wife surrendered all of their passports. Webb carries three.

Toshiba’s
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CEO resigned Tuesday,the Wall Street Journal reports, a day after an outside investigation said he and other current and former executives are responsible for overstating profits by more than $1.2 billion over the last seven years. In a 300-page report published Tuesday, the panel said the executives “put intense pressure on the company’s business units, ranging from personal computers to semiconductors and nuclear reactors, to achieve unrealistic profit targets. Management sometimes issued such challenges shortly before the end of a fiscal quarter or year, encouraging division heads to cook the books, the panel said. The SEC will likely investigate next. Ernst & Young in Japan is the auditor of Toshiba. It also audited another recent fraud-ridden company in Japan, OlympusOCPNF, +7.70%.

New York Department of Financial Services officials have subpoenaed several of the executives of Promontory Financial Group, a financial-services consultancy, including an executive who testified before Congress two years ago, the New York Times reported Monday. It’s part of a long investigation into potential conflicts of interest at the firm related to its work, in particular, for the British bank Standard Chartered
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, which was suspected of processing billions of dollars on behalf of Iran. The regulator is looking at whether Promontory, under pressure from the bank and its lawyers, sanitized a report to NYDFS to minimize the volume of allegedly illegal transactions. That probe also ensnared Deloitte’s financial-services consulting arm, resulting in a $10 million fine and one-year bar form doing business with the agency. Global accounting firm PwC was also fined $25 million and barred for two years by NYDFS for similar issues with Bank of Tokyo Mitsubishi
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. The “crackdown,” the New York Times says, is based on the concern that “the industry’s business model is rife with conflicts of interest. While consultants often claim that they provide an impartial assessment of a bank’s problems, they are also handpicked and paid by those same banks.”

On the fifth anniversary Tuedsay of the Dodd-Frank Wall Street Reform Act, it’s interesting to note how strenuously some have been trying to repeal it in whole or in part. As of July 15, 2015, according to Davis-Polk, 271 rulemaking deadlines have passed. Of these 271 deadlines, 192 (70.8%) have been met with finalized rules, and rules have been proposed that would meet 46 (17%) more. Rules have not yet been proposed to meet 33 (12.2%) requirements. Of the 390 total rulemaking requirements, 247 (63.3%) have been met with finalized rules, and rules have been proposed that would meet 60 (15.4%) more. Rules have not yet been proposed to meet 83 (21.3%) requirements. The firm put together a graphic to show the challenges to the bill, including a provision inserted into the December appropriations bill known as the “swaps push-out rule,” reversing a Dodd-Frank provision that prohibits banks from using taxpayer-insured funds to engage in derivatives trading.

Francine
McKenna

Francine McKenna is a MarketWatch reporter based in Washington, covering financial regulation and legislation from a transparency perspective. She has written about accounting, audit, fraud and corporate governance for publications including Forbes, the Financial Times, Accountancy and the American Banker. McKenna had 30 years of experience at banks and professional-services firms, including at PwC and KPMG, before becoming a full-time writer.

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